Two one way signs.

Two one way signs.

Photo credit: Brendan Church/Unsplash

The Generational Dilemma We Face

He did it! Helmut K. has been at the top for a few years now. He is a board member for an international corporation. His salary is in the seven-digit range. In the boardroom, there is a private elevator. It serves him with his own access card, and he always has priority in front of all other employees. The thick carpet dampens the clacking of his welted shoes. Mr. K. may use two secretaries as support. From now on, he only flies in first class. But he does not need his own driver — some modesty does good here and there and sends important signals. Helmut K. has gained just about all the privileges that he dreamed of during his 35 years of service. 

And like Helmut K., a whole generation of today's 50 to 60-year-old top managers face a dilemma.

A generational clash

He has worked in this business right from the start. First as a trainee, and he gradually worked his way up the career ladder. A picture book career across all hierarchical levels — right up to the board. He has renounced much. Family almost always came second. The sole earner, he has seldom seen his wife or children. Sacrifice for the job, the career.

A cliché? Maybe. But this goal could not be achieved otherwise. Life is compromise!

Inside and outside the company he is well connected. He understood how the game of power, success, and influence worked — and he used it to rise to the top.

The contract has just been extended for another five years. Pure formalism. The business is buzzing. The bonuses are impressive. Everything seems perfect...apart from the buzzwords that rain on employees and companies from all sides. No conference or forum dispenses with these topics. They have evidently become an integral part of entrepreneurial and social thinking: digital transformation, disruption, new work, generation X and Z, digital leadership.

Helmut K. was, for a long time, even the innovation driver. But he can't do that now.

Helmut K. finds it odd how the HR department is conducting job interviews now. You have to experience the people live? And what is all this talk about whether someone is a "cultural fit"? It is important that applicants have a master's degree, better still a doctoral degree. Nothing beats performance...right?

Many of today's 50-60-year-old top executives and executives are in a dilemma. Their lifelong career struggles are now being completely questioned by rapid technologically and socially driven changes. Their successes are even being denied. Once intelligence, discipline, and obsessive work shaped the picture, now our entire understanding of leadership is turned on its head. The entrepreneurial and social challenges are profound. They overshadow everything that has gone before — and thus the management team is facing big problems. Should all their effort have been in vain?

Understanding the dilemma

The speed of change requires a high and fast adaptability. Most managers who face this "generational dilemma" find it difficult to adapt adequately. Their previously acquired knowledge and the associated solutions work only conditionally. However, it is also difficult because the cultural change calls into question everything that this generation of managers believed so far: hierarchies, fixed processes, top-down decisions. Above is thought, below is work.

Technological change is changing the way we work and live, turning production processes and value chains upside down, requiring and enabling new ways and means of communicating and interacting with employees, customers, suppliers or business partners. However, German top managers are only partially prepared to correctly assess the potential and risks of the digital transformation and derive the necessary conclusions and actions. According to studies, just a third of German executives have the necessary know-how for the digital future. But understanding technology is only one aspect of the current challenges. Equally important is the ability to react quickly to changing conditions in the market and society to make companies future-proof. 

More than a few find this development unfair — understandably. It's hard to accept that you have to start at almost zero again and that the old knowledge and a lot of experience are hardly worth anything anymore. At least, that's how the situation is perceived by many. 

The so-called Millennial generation condemns pure profit maximization and speaks out loud and openly for more entrepreneurial responsibility. It relies on cultural solidarity, togetherness, and can not be swayed by money alone. A collision of the value models. 

We need to adapt

Helmut K. stands for the generation of managers who are deciding today how Germany's economy will be guided into the future. However, when executives persist in traditional thinking and old patterns and act with little enthusiasm for change, important decisions are missed. The current transformation is a novelty from a historical perspective. It is taking place in complex dimensions and with unprecedented speed. This makes it difficult to understand for many executives.

The pressure for change can come from the owners. Family businesses have an advantage here. As a rule, they are closer to the market, their competitors and employees, and they also endeavor to pass on their achievements to future generations. For publicly traded companies, this pressure for change should come from the Supervisory Board. However, these are often not only ten years older but are also caught up in similar thought patterns as previous, outdated generations.

Looking to the future with confidence requires a new leadership culture, a greater understanding of digital technologies, and the willingness to think things over from scratch even at the highest levels of the business. This includes questioning what has been learned, throwing experience away, and shaping the future with curiosity and openness. We have to assume that nothing will remain the same as before. The only constant we have is that of permanent change. If you do not drive the changes in the company yourself, the market will take care of it. In this respect, it may already be too late for many companies.

Are you prepared for exponential change? Is your business? We're exploring how organizations can adapt and individuals can thrive at our Summit on Corporate Transformation & Exponential Thinking.

The piece of opinion by Stephan Balzer has been published in a similar form in the daily newspaper Die Welt on 20.02.2019. It has been translated into English for our audiences.

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